City of Tshwane rejects Eskom’s proposed electricity hike

The City of Tshwane has rejected Eskom's application for a 19.9% tariff increase in electricity.

Eskom wants its clients to pay on average 19.9% more for electricity from April 1 next year and proposed that municipalities pay 27.3% more for bulk electricity purchases from July 1 2018.

The city rejected the proposed hike through the South African Local Government Association (SALGA).

Tshwane mayor Solly Msimanga said this was done on the basis that the city and its people cannot afford such an increase. It would effectively mean that a 27% increase awaits the city and its residents‚ Msimanga said.

The rejection follows submissions made by the City of Tshwane and other municipalities to SALGA.

The collective objections to the hike include that it is not affordable for the city or to the residents‚ that there is more room for reducing inefficiencies‚ that the Independent Power Producer's forecasting in the proposal is unrealistic and that it is projecting on projects that have not yet come online‚ as well as that half of the tariff is based on sale forecasts‚ even though Eskom has acknowledged sales are dropping.

Msimanga said electricity sales in municipalities show a sustained downward trend over the last years and in some cases have dropped significantly.

"Today the sale of electricity is at record low levels for all municipalities. The 19.9% tariff hike would put great strain on the City of Tshwane as we already grapple with issues of non-payment‚ low revenue collections and theft‚" Msimanga said.

The city made it clear that it cannot bear any increase that is higher than inflation‚ as it would put further strain on poor people in the community. Msimanga said with every electricity hike‚ it costs the city more to cross-subsidise the poor.

Nelson Mandela Bay mayor Athol Trollip said in a statement in September that the metro "vehemently" opposed the increase.

- BusinessLIVE